Strike an ESG Balance that Works for you and your Target Audience

When it comes to the qualities today’s consumers consider before making a purchase, a brand’s participation in corporate ESG (‘Environmental, Social and Governance’) initiatives are growing in importance. The World Economic Forum reports that ESG and similar metrics have made a tangible and resounding impact on global business operations with over 150 organizations committing to the Forum’s internal ESG coalition alone — and counting.

Whether it be carbon neutrality, worker’s rights, or charitable giving, many shoppers are starting to look for their brands to have a vision—and they also expect actual company practices to align with their brand communications. But determining which matters and causes will most positively influence their brand identity — without alienating their potential audience or negatively affecting the bottom line — can feel like an insurmountable task. Here are some of the major factors to consider on the road ahead.

Navigating the corporate ESG landscape

The implementation of corporate ESG initiatives can feel limiting but shouldn’t; for every brand or product there is a complementary ESG cause to suit their vision and ethos. Current research into the most popular initiatives within each sector can help steer thoughtful marketing teams by first determining which causes are best aligned with their consumer’s expectations and, in turn, brand identity. For example, when it comes to environmental initiatives, topics like deforestation, the preservation of air and water quality, and disruption of natural resource depletion resonate highly with U.S. consumers. Finding opportunities to connect your brand’s identity with these distinct causes are a great first step in building a solid ESG foundation.

Corporate ESG initiatives shouldn’t just be directed at consumers, but instead should weave and flow through your mission and ethos as well in order to attract top talent. Forbes has reported that, according to research performed by professional-social giant LinkedIn, 71% of professionals would consider taking a pay cut to work at a company that aligns with their values. Research from the American Marketing Association is bolder yet, finding that 90% of millennials are among those willing to earn less when the impact of their work means more. Aligning your brand with a complementary ESG portfolio will not only inform the value of your product, but the value of your company as a potential workplace for early career professionals.

Communicating your cause

There’s also the challenge of how to best communicate corporate ESG practices to truly complement one’s brand. U.S. consumers, for example, expect environmentally-driven corporate initiatives to be communicated via a company website — though this is not the case across the board. Research shows that communication through other vehicles, such as media coverage, can also be impactful. While matching your brand with the right ESG is a great place to start, successfully communicating those initiatives and connecting them back to the central focus of your company requires consideration of the medium itself.

Understanding how best to communicate and where to communicate about initiatives will be key in overall marketplace success and acceptance, but has not always been a factor in sales themselves. The UK Institute of Practitioners in Advertising compared 47 purpose-driven campaigns and 333 non-purpose campaigns, finding that the standard campaigns generated, “45% more ‘large business effects’ (sales, market share, customer acquisition/loyalty, pricing power and profit) than purpose-driven ones.” If you are failing to communicate about your investment in ESG initiatives in the right mediums, with a consistent and compelling narrative, then you may be failing to inspire consumers to take a wished-for action.

Meeting varied consumer expectations

Listening to your target audience will be one of the strongest tools your brand can call upon to ensure impactful ESG implementation. Generational differences impact the reception of such initiatives with Gen Z and Millennial consumers, for example, most engaged by social issues such as mental health, serving underserved communities, and DEI initiatives. Unsurprisingly, the perception of corporate ESG initiatives (and impact of their message) also varies between genders. Overall, men find the adhering to government standards surrounding the environment leads in importance, while women find a wide variety of social issues to be more important than men, such as diversity and equality.

Leveraging market research to best define your target consumer base will help you to narrow the scope of your ESG investment while ensuring the greatest benefit both for your brand and the causes you choose to support.

Investing in sustainability (the right way)

If you’re looking for an all-over approach, you can’t go wrong with the sustainability arm of ESG initiatives. Not only do efforts toward sustainability meet governmental and other regulations, this is rising in importance for consumers. Across the board, U.S. consumers consistently cite environmental concerns when it comes to the kinds of causes they expect to see brands taking action on. To this end, thirty-seven percent of U.S. consumers indicated corporate environmental standards are most important to them, followed by social (32%) and trailed by governance (18%). Also, sixty-three percent of consumers found importance in American-made and locally-sourced product manufacturing and another 60% said they would pay more for a product or service that supports or aligns with their values.

Once you have a solid foundational understanding of your target audience makeup, and their desires and demands in the ESG arena, you can find the right initiatives to pursue. Listening to your audience actively and thoughtfully will continue to advise not only your actions, but how you communicate those actions most effectively. Consumer expectations are high, and you must meet them head-on to stay competitive and relevant. Implementing the right ESG initiative will not only delight your customers — it can guide your brand identity for years to come.